Finding mortgage alone may be detrimental

By Staff Reporter

Posted on Friday, 28 September 2012

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Investors looking for a mortgage alone may take longer to get into the market and miss opportunities, according to a recent analysis.

Quality mortgage brokers frequently look at more than 100 aspects of a home loan to determine that which suits an investor best, said Smartline’ Personal Mortgage Advisers’ executive directior, Joe Sirianni.

Mr Sirianni explained that there is an incorrect perception among those many of those applying for mortgages that ‘all banks are the same’.

“There is no doubt that there is a dramatic difference in what the banks offer to customers,” he said.

Of the 500 products currently available through Smartline’s lenders, 108 features are examined to find the best option.

“With so much to consider, if you go direct to a bank or even a couple of banks, it raises the question, ‘did you get the best loan for you, or the best loan that the bank had to offer?’”

Features in this list include the variable interest rate, three year fixed interest rate, up-front fees, ongoing fees, borrowing capacity, deposit required and major bank LMI premium.

The table below, which covers seven of these 108 features, provides some insight into the variables associated with the loans currently on offer.

“You can see that considering all the alternatives can have a massive impact on your ability to purchase a property,” he said.

“This can be on everything from the interest rate you pay, the up-front and ongoing fees, the amount you can borrow, the deposit you need or the LMI premium you could pay.”

Understanding these aspects can save a considerable amount of money and can also dictate whether or not an investor get into the property market earlier and the type of property that can be purchase.

The difference in loan products can be ‘extreme’ and mortgage brokers are increasingly favourable, now responsible for 45 per cent of new home loans where only 10 per cent of loans were through a mortgage broker in 2002.

- What do you think? Have you successfully found your own loans or do you use the services of a broker?